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Comment by porcoda | Hacker News Reader

Nothing is shocking about the insurance industry anymore since they’ve been pulling this kind of thing for years. To me the most shocking thing is the people who defend them. I understand the drive to make money and build huge businesses: what confuses me is that we treat human health the same as things that don’t directly impact the health of people. It seems to me that there are endless opportunities to get insanely rich: I’ve never understood why we don’t set aside certain areas and just agree that they are not the place to do that. (I know, leaving potential profit on the table is sacrilegious to those who worship at the altar of the almighty dollar…)

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The problem with greed is it has no limits. These people are happily dancing on graves all the way to the bank, and we allow it.

"chart goes up and to the right!" seems to excuse just about anything in some peoples' political philosophy.

much shareholder value was increased, I'm sure.

Why would anyone expect it not to go to the right?

I wonder if places that read right to left also chart things so that 0 is on the right side and the positive numbers are on the left.

What I believe has broken in the US, UK and is well on the way to breaking in Australia, is the confidence that principles will win over greed. If you believe there is a critical mass of good principled people who will stand against selfishness, then being principled is a smart choice. If you do not have that belief, being principled feels like a foolish extravagance. As many have said before, it's got to the point people have more faith in a zombie apocalypse than in citizens cooperating for their own common good.

In many ways, the problem is that we do treat health care different. What other industry will actively reject attempts to ask about prices? What other industry just sends out bills with no contractual basis and exaggerated fraudulent amounts made up after the fact? What other industry do you need to buy "insurance" to even be able to financially communicate with service providers? What other industry does the government provision social services by telling businesses that they must serve some of the most expensive customers for free, and then ensures monopolies so those large losses can be made back from every other customer? What other industry is it impossible to obtain services until a professional declares that you "need" them, at which point it's supposed to be close to free?

These massive profits are because of the so-called "regulation" that has continued to keep market dynamics away, new entrants out, and the industry supremely entitled (from doctors to billing departments). The political debate continues to be sidetracked by doubling down on this mistaken idea of thinking constructive outcomes can simply be declared in law. What needs to happen is to focus on making healthcare a competitive market where patients have agency, while also providing direct financial subsidies when people need them.

The problem is that it is different. What other industry sells a product that you might need in order to survive or to not be disabled which requires the dedicated efforts of multiple professionals with a decade of post-secondary education? What other industry sells a product that you might suddenly need at a moment’s notice that is the only way you’ll survive the day, that requires sophisticated equipment, dedicated facilities, and a team of the aforementioned highly educated professionals?

Most industries are either optional things you want to have but can live without, or necessities you need on an ongoing basis that need more than a few minutes of individual attention.

There’s a lot more to medicine than emergencies and lifesaving treatments. But I think those are the original sin from which the rest flows.

The basic question is this: should people be left to die if they have a sudden life-threatening event (heart attack, hit by a bus, shot) and they can’t demonstrate an ability to pay for treatment? (Note, not the same as not being able to pay for treatment. This would potentially apply to a rich person who got mugged and left for dead, for example.)

Few will answer “yes.” And everything else flows from the “no.” The US’s universal health care system is built around it. We pretend we don’t have universal health care, but we do. It’s just tremendously shoddy and weird. The one place with universal care is the hospital emergency room. Those have been required to treat everyone regardless of ability to pay since 1986. Once you start doing that, the rest flows from there. People start saying, what if it’s not critical to survival but they’ll be crippled without it? What if it’s life critical but there’s time to verify payment?

Can we do better without removing that? No doubt. But we’ll have a hard time getting to a proper competitive market.

Other industries with these characteristics (police, firefighting, rescue, ambulance if you count that separately from medicine) are usually handled by the government or at least contracted by them.

> Few will answer “yes.” And everything else flows from the "no."

Everything else has flowed from the "no", but I do not think it needs to have. Imagine the government being a definitive payer of last resort, instead of this unfunded mandate where hospitals have to provide emergency service for free but then receive a bunch of regulatory capture to make up for it.

That still leaves an avenue for hospitals to defraud the government about how much providing that care cost, and emergency care has that dynamic intrinsically regardless of who is paying. But that's still leaps ahead of basing the entire industry on a foundation of billing fraud shakedowns. And it would be a lot harder for emergency departments to claim exaggerated fraudulent costs when the rest of the hospital is charging much less.

The vast majority of care is not life saving emergency treatment, and this is where the brokenness of the current system gets really galling. For example I just had a specialist declare that the proper course of treatment is to follow up in 12 months. I nudged them that 12 months seemed like an awful long time, but they held fast. I would happily pay for another check in 6 months if the system would let me. But instead, the concept of patient agency has been completely scrapped in favor of top down "necessary" and "not necessary".

I think there are two paths. Having the government be a payer of last resort for emergency services starts you down the road of paying for more and more things. You’ll start asking questions like, why are we paying massive amounts to stabilize a poor, terminal cancer patient who collapsed when we could have paid 10x less on screening and early treatment? Why aren’t we paying for procedures that allow people to work and bring in more taxes than the procedure costs? Why are we ok with paying to save someone’s life when they’re hours away from death but not when it’s weeks away?

Eventually you’ll get something like the systems you see in most wealthy countries.

Or you can go the way we did, which is enact universal care in the dumbest way and pretend we didn’t.

I don't agree with this dichotomy. It asserts a monolithic top-down perspective, making it completely inapplicable to the dynamic I described in my last paragraph. It's "universal care" only in the sense that its universe has been defined to exclude most patient agency. Divergence from other possible patient-desired choices then tends to get rationalized away.

For example, perhaps having a follow up after 6 months only increases the expected value of the outcome by 0.1% and then multiplied/integrated by expected lifetime earnings it's not worth the economic cost of the system paying for that earlier follow up. But being my life, I should be able to spend my resources (including my time, which this current top-down model certainly doesn't account for) to achieve an outcome with much more utility to me personally than simply how much income (/taxes) I'm expected to produce.

It sounds like you’re talking about what you want, and I’m talking about how I think things are. I don’t see a wealthy country being able to do anything other than some form of universal care with heavy government involvement in the industry to make it happen. There’s nothing preventing it in terms of economics or technology, I just don’t think people will accept it.

Most of these systems do allow that sort of patient agency for those who can afford it, though. Maybe you had a weird specialist who didn’t want to see you earlier, but there are plenty of doctors who will go beyond your insurance coverage in exchange for cash.

We were both talking about how things ought to be. I was using an example of what I wanted in a specific situation to demonstrate the general lack of patient agency.

Also, it being possible to spend an outsized amount of effort obtaining healthcare outside the system isn't really relevant to discussing the failings of the current mainstream system. Every time I've tried to even get a straightforward price from a doctor in the US, I've been met with indignation like how could I even be asking such a thing.

Does anybody defend them?

I’ve been on the selection side as an employer and several others will probably echo what I’m about to say.

Virtually every insurance provider is going up 15-20% / year to the point that it’s completely unsustainable. United was quoted to me as almost 20% lower than current rate for our provider (before they are about to go up 20%).

On premium alone they will save some people close to $500 / month for what is…”on paper” the same coverage.

I’ve read all of the same stuff about United that everybody else has but the finances put employers in a very difficult position.

I feel people defend them by opposing any other approach to solving this. Politicians in particular say things like "preserving customer choice", which I think just means having the ability to select among all the terrible insurance companies who will treat you poorly.

That excuse doesn't even hold up because in places like the UK which have universal healthcare, private health insurance still exists alongside it as a "premium" option. That's more choice!

> Politicians in particular say things like "preserving customer choice"

But that’s not shocking. Lobbyists and campaign donations make such behavior expected.

And shouting about "death panels" in public healthcare systems, as if the private insurance companies don't have people whose whole job is denying as many claims as possible

Yeah. The biggest difference is you can elect the public healthcare death panels, or call your senator or representative to lean on them. There's not a thing you can do about the private insurers' death panels.

Medicare may turn you down for an organ transplant because there are only so many to go around and you're not the best candidate. Private insurance may turn you down because "shareholder value".

Payers don't really play any role in allocating the limited supply of transplant organs.

https://optn.transplant.hrsa.gov/patients/about-transplantat...

They will also complain about waiting times - as if you don't wait with private insurance companies.

That is after you convince them that your procedure or exam is even needed, which can be a long protracted fight in itself.

Most people don't even get the ability to select among all the terrible insurance companies - their employer chooses for them!

Technically, they have the ability to choose whoever they want, they just have to pay full price with post tax income. If people accept their employer's choice, then they get to pay for a lower, employer subsidized premium with pre tax income.

That is one thing that would fix this problem fast. Let individuals tax deduct the price of their health insurance directly. There’s no reason it should only be up to your employer.

Sure, I'll defend them, conceptually at least. I think most actors in this system are in some sense corrupt, and I don't think insurers are the most corrupt. Pull up the 2022 National Health Expenditure table, "National Health Expenditures by Type of Expenditure and Program: Calendar Year 2022" and look at combined hospital and physician expenses compared to insurer expenses; it's pretty black-and-white.

> I don't think insurers are the most corrupt

Lol, nice defence

One should not profit from denying care. All health systems ration care. Doing so in a way that people profit from denying care is immoral.

And inefficient to boot!

If you believe that, you should have a bigger problem with what providers bill, because that's the ultimate origin of the constraints.

Your argument would be more convincing (well, not really because it’s typical bad faith contrarianism) if insurers weren’t also some of the largest hospital and clinic owners in the U.S. and use this to rob people blind on both ends.

Which hospital chains are you referring to?

UHC is the largest single employer of doctors in the US.

https://www.statnews.com/2024/07/25/united-health-group-medi...

> It’s no secret that UnitedHealth is a colossus: It’s the country’s largest health insurer and the fourth-largest company of any type by revenue, just behind Apple. And thanks to a series of stealthy deals, almost 1 in 10 U.S. doctors — some 90,000 clinicians — now either work for UnitedHealth or are under its influence, more than any major clinic chain or hospital system.

They purchase physician groups... and then pay themselves higher rates.

https://www.statnews.com/2024/11/25/unitedhealth-higher-paym...

> UnitedHealth Group is paying many of its own physician practices significantly more than it pays other doctor groups in the same markets for similar services, undermining competition and driving up costs for consumers and businesses, a STAT investigation reveals.

I take it then that we agree that for profit health insurance companies profiting from denying care is immoral. That there are other immoral actors is not germane to the discussion.

No, we don't agree. I think there are different values implicated in our system, in a system like the UK NHS, and a system like Australia's (for the record: I'd take Australia's over ours).

The UK does a good job of hiding economic concerns from its users, at a cost in availability of services, especially high-end and experimental interventions. The UK makes these rationing decisions knowing that some people are going to be denied life-saving care, but in exchange for that everybody else in the system will get predictable access to their care.

The American system does a good job of getting services delivered to customers; it does a better job of that than the NHS does, if you measure in interventions performed; it does such a better job at that that it's a real problem in our system: we overprescribe and overdeliver interventions that drive costs and decrease certainty as payers work out which things to cover and which not. The flip side of that is that everyone in that system can tell themselves that the system is doing what it can to gate delivery on whether care is truly needed and will be effective, and that it's not categorically denying care because of top-down mandates.

Neither set of values is totally benign. You can prefer one or the other.

I can go all 12 rounds on this topic, but if I keep writing about this I'm not going to write the work thing I'm supposed to write, so I'll leave it there.

Then your reply above to me was a red herring and as such a bad faith reply.

The American system does a good job of getting services delivered to customers;

Therein lies one of the reasons the U.S. system is immoral. There are lots of people who can’t afford to be customers.

It is immoral to profit from denying someone healthcare.

It follows that providers should provide care for free. Anything else is profiting from denying care. I guess you're just a full communist? If that's the case, just come out and say it so we can agree to disagree and move on.

There are other options. Think about it a bit. Nonprofit insurance companies for one. National healthcare is another option that does not require communism. Don’t be a lazy thinker.

> look at combined hospital and physician expenses compared to insurer expenses; it's pretty black-and-white

I mean, yeah. They're doing all the work.

And billing us 4x more for it than Europeans, and, further: a lot of that work is wasteful and unnecessary (see: spinal fusion surgeries, back imaging). There were more MRI machines in Massachusetts in 2023 than there where in all of Canada.

> And billing us 4x more for it than Europeans

In part, because dealing with insurers is immensely costly in staff and time.

(Other parts include the immense cost of twelve years of secondary education here; a million bucks in student loans isn't uncommon.)

> a lot of that work is wasteful and unnecessary (see: spinal fusion surgeries, back imaging)

Which makes the "insurers are there to reduce waste!" argument especially tough to stomach.

Doctors don't make 4x more here than in Germany because of insurance costs.

Healthcare here isn't 4x the price because of doctor costs, either.

https://www.washingtonpost.com/business/2023/08/04/doctor-pa... / https://archive.is/ZBRMx

> Polyakova and her collaborators find doctor pay consumes only 8.6 percent of overall health spending. It grew a bit faster than inflation over the time period studied, but much slower than overall health-care costs.

> “People have a narrative that physician earnings is one of the main drivers of high health-care costs in the U.S.,” Polyakova told us. “It is kind of hard to support this narrative if ultimately physicians earn less than 10 percent of national health-care expenditures.”

Exactly. Even if you forced doctor compensation down to the level of other countries, that's, what, a 6% overall reduction, at best? Wow, so now when you get a surprise bill for $5000, it'll instead be $4700 instead! Hooray! We did it, Reddit/HN!

Does anyone think American healthcare was thereby fixed? I don't!

Now, FWIW, I'm happy to accept that US doctors are overpaid, and that there are feasible ways to make progress on that front. It's an important conversation to have. But it has virtually nothing to do with what makes US healthcare so brutal and kafkaesque.

Now do the math on how much you'd save if you zeroed out health insurance costs.

Does that include the artificially bloated cost of care (compared to e.g. Medicare), the costs of Medicare Part D fraud, and the costs of having care denied and delayed (2–3x the claim denial rate of Medicare) or just the premiums?

Last time we did this song and dance you doubled down on incorrect assumptions about how Medicare functions. So, no, it's not likely I'll come to the same conclusions as you.

Go ahead and do it any way you'd like, show your work, and I think you're going to reach the same conclusion about how silly this is.

Yes, it is pretty silly to think American healthcare would no longer be a global laughingstock if surprise bills of $5000 were replaced with surprise bills of $4700.

No, they're billing insurance companies that much. For-profit insurance companies are incentivized to drive up the cost of care because of the cap on their profit margins. More expensive care equals more profits as a bigger pie means a bigger profit even if the percentage remains the same.

Medicare's rates are about a half to a third of what private insurers have managed to negotiate. Funny how that works.

Doctors are not the problem with American health care, for-profit insurance is.

It's easy to just blame the insurance providers, but keep in mind:

Everybody expects a higher standard of care, because now we treat things that we didn't even know about in the past. For example, I have a CPAP and went through surgery for sleep apnea. 50 years ago, who knows what would have happened to me?

Medical providers are incentivized to "find" things to bill for. For example, I went to a podiatrist for foot pain, and she tried to figure out how to have me visit monthly.

Likewise, end-of-life issues can get very expensive, because it's hard to say "no" when loved ones' emotions are fragile.

The point is that other countries are realizing the same or better (generally better) levels of care while confronting the same issues.

Privatization and ineffective/lobbyist-written regulation is and has been the problem from the beginning.

Adding "but before all those complex concerns, our number one priority is making a profit" is literal insanity.

Add to the mix that employers are only incentivized to provide care for accute conditions that jeopardize productivity (rather than things that improve longevity and quality of life), and I mean... what did anyone expect?

Healthcare is complex but understanding why we're living in a failure mode isn't. The fundamentals are completely incorrect.

I have a CPAP too, and the insurance paid for part of the cost, but most was still paid for by me. I investigated the price of buying it directly, for cash, and it was only a few hundred dollars more.

This is why we need to install National Health Care. Single payer systems get the best rate, and we can make a national decision over how much we can afford. The current system is insane and unsustainable.

> $500 / month

What the actual f!?

That saving is double the total cost of my private health insurance in Australia!

This includes the “Medicare levy” tax I pay at the highest rate because I get an above average income.

Health insurance cost is something I just don’t think about.

My missus reminds me every few years to combine our plans because it might save us AUD 250 per… year. Maybe.

Yeah, it's bad here. My health insurance premium (family of four) went from $3,000 US/month to $3,600/month on Jan 1. That doesn't cover everything, either - there's a deductible, and then there's copays, which means up to $9k/year out of pocket on top of those premiums.

Dear God. I pay a bit more than 400 EUR/mo, my employer pays a bit less than that, and my employer is delighted for me to take sick leave if I've got a cold because guess who pays my sick leave?

My health insurance.

(Germany, "public" insurance with one of the 150 or so "sickness funds" those of us in the 90% who have to be on public insurance can choose from)

Does your insurance also cover the rest of your family? As a single person I pay around $600/mo for insurance (a Kaiser silver HMO plan). Adding dependents will absolutely drive up cost here.

I haven't seen any defenses of insurance companies lately. In fact, it seems like insurance companies are the only safe target for criticism of US healthcare problems right now.

> Virtually every insurance provider is going up 15-20% / year to the point that it’s completely unsustainable.

The elephant in the room is that healthcare costs are going up. Even if we waved a magic wand and eliminated health insurance overhead, profits, and executive pay, your rates would still be going up that same 15-20% per year.

This is the part that seems to confuse everyone. There's a common misconception that insurance companies are raking in huge profits and that prices would plummet if we could just eliminate those profits. You see it throughout this thread with phrases like "dancing on the graves all the way to the bank" and blaming "capitalism" or "corporate greed" with the implication that insurance companies are the purveyors of this greed.

Yet we have non-profit insurance companies. They're not appreciably cheaper. If you look at insurance company profits, they're actually relatively low for companies that large. If you map healthcare spending on a big pie chart, the slice that goes to insurance company administrative overhead and profits is not that big. Single digit percentage. Even companies with socialized medicine have some overhead in this same slice.

The problem is multifactorial. The challenge is that it's not politically safe to touch on some of the drivers of US healthcare costs. Everyone loves to point at insurance companies and drug pricing because it's easy, but things get much quieter when you point out that our doctors, surgeons, and providers are paid substantially more than their peers in other countries. Americans also love to consume more healthcare and many would be very upset if they were forced to accept the level of allowed care and delays in other countries. It's not just insurance companies who have decision trees about when and what care is allowed. Americans also consume medications at an extremely high rate. Again, they don't take kindly to suggestions that we limit prescribing or drug prescriptions (see outrage over the DEA limits on amphetamine production or complaints about hesitancy to prescribe opioids, even though we already consume far more opioids than most countries).

Many Americans also live unhealthy lifestyles which contribute greatly to healthcare costs, but it's taboo to mention that. Everyone has seen the life expectancy charts showing US lagging international peers, but fewer people have seen the per-state version that shows that life expectancy depends heavily on where you live (and therefore what you eat, how active you are, and the local culture). Instead, the only acceptable target of blame is our food. While we have some room for improvement, we're not going to solve the obesity epidemic and lifespan problems by banning red dyes. Lifestyles and diets need to change, but that's a difficult topic. Much easier to point the finger at insurance companies, "CEOs", and the food industry and pretend that those cover all that is wrong with healthcare.

This is why it's politically difficult to accomplish anything in the United States. If anyone tried to copy and paste the health care system of a European country, from doctor pay to allowed procedures to more limited prescribing practices, there would be riots. People want all the healthcare, they want it now, they want it how they decide, and they want someone else to pay for it.

I was shocked to hear from an anesthesiologist friend of mine in Germany that an American salary could be 10x higher.

The medical costs are skyrocketing because insurance companies inflate the price of medicine. The slice of the pie that goes to the insurance company is small compared to the pie, so they make the pie bigger to make their slice bigger. The other parts of the pie, many of whom are owned by the same insurance company, aren't complaining. They are horribly inefficient. The cost of hospitals processing payments to insurance companies alone (and note this is typically one company sending itself a bill) is nearly $400 Billion per year. That's about 8% of all US healthcare spending, and it generates no value.

What isn't happening is increasing cost because of either more or improved care. As time goes on it should be easier to make drugs, meaning that prices should go down. Instead the cost per gram of even very simple drugs like epinephrine and insulin are going through the roof. Doctors are paid well, but they've always been paid well, and in fact while physician pay over the past 70 years has kept pace with inflation, it has been far outstripped by the price of education needed to achieve that salary, meaning doctors today are generally worse off financially than they used to be. other medical professionals like nurses are seeing increasing workloads without commensurate increase in pay. American life expectancy is decreasing, as are numerous other measures of healthcare efficacy. While we are paying more, we are getting less than we used to.

Then there is the common argument - our high drug prices subsidize new drug development. Only issue is that new drug development has been steadily slowing down. Most drug development is in the form of minor changes to existing drugs that serve little purpose beyond resetting the clock so cheap generics don't come on the market. Where new drugs are developed, they tend to be focused on profits, for example new pills to help people maintain erections rather than treat rare diseases. When the stars align and a new drug is developed that genuinely helps people, it tends to be insanely expensive, such as the cancer drugs TFA is talking about. This is not to say that nothing at all gets done, but it's less than it used to be.

Is insurance the only problem in America? No, obviously not. But at the same time, healthcare prices dramatically higher than anywhere else in the world that are also rapidly increasing is not an inescapable fact of life. Our healthcare can be both substantially cheaper and higher quality than it currently is by eliminating purposefully inefficient systems that use anticompetitive practices to jack up prices. When the dust settles US healthcare might remain a bit pricy per capita - part of having a country with very high wealth per capita is that everything is expensive per capita - but our money will be going towards paying skilled people to do useful work for our benefit.

How do you respond to people that say the profit motive is what drives innovation, and in the long term we’d rather have better, novel treatments sooner

Even if that's true for the actual pharmas, how are insurance companies like UHC innovating? They're just middlemen.

They prevent unnecessary treatments! /s

I'm not sure about UHC specifically, but insurance companies do innovate. Some insurers have invested pretty heavily in biotech and wearables, and they're also a big driver behind telehealth/remote health monitoring tech. We can cynically say that they're just in it because they want to reduce costs – and that's probably true – but it'd be simplistic to say investing to reduce costs is purely selfish.

> biotech and wearables

Tracking and data harvesting, excellent!

Or encouraging healthier lifestyles by blending technology with behavioral health incentives.

Or both.

> they're also a big driver behind telehealth/remote health monitoring tech

Until COVID, insurers in my area wouldn't cover telehealth at all. They opposed it tooth and nail.

Profit motives for medical / biotech research, yes. What innovations have insurance companies made in the last 100 years besides to squeeze out more profit?

A lot of that research is primarily done in university labs, mind you. On the taxpayer dime. Somehow the research escapes a lab and Pfizer manages to put some stupid name on it and reaps billions in profit.

I guess they have their own labs, you just never learn about their failed experiments.

> failed experiments

Wasn't that what Milla Jovovich was called in to deal with?

It requires billions of dollars and a decade+ to translate academic research into a clinical outcome. Most academic research is not reproducible or robust enough to even be replicated outside of the lab that performed it - and this will only be discovered after spending millions of dollars of private funding.

I get that completely - and you're completely correct: most research isn't ready for clinical trials let alone commercial distribution. And even then, only a small amount of reproduce-able work matures into a finalized product. Yes, there needs to be financial incentives for the private sector to find promising work, and funding the next steps once it escapes the University ecosystem. I'm all for that. But as a society we need to be clear about where the initial funding comes from, and who those are who pay for that first round of funding are.

That's a fair criticism, although I've worked in both industry and research -- a lot more directed practical research to reach commercial viability happens in industry, whereas a lot of the fundamental research happens in academia. And as a sibling commented, a lot of unreproducible research comes out of academia. Also, there are spinoffs from academia regularly that allow the original researchers to profit directly from their efforts.

Still, that doesn't justify insurance companies siphoning off money for their shareholders. Especially in these cases where they own/control both the insurance company and the pharmaceutical distribution.

I'm not trying to go to the mat for Big Pharma, but I'm certain that they do a lot more than slapping a stupid name on the research right at the end of the pipeline. Most universities can't fund sustained, large or diverse clinical trials, for instance; they also can't generally do the long-term post-market research/surveillance once a drug has been released.

Most pharma companies can't even fund clinical trials. That's why big pharma (Pfizers of the world) are more like holdings companies that buy smaller pharma companies (biotechs) with novel molecules and they big pharma eats the risk of putting the smaller companies' inventions through trials.

So the only contribution of Big Pharma is that they take the risk, collect the funding and do some administrative stuff. It sounds to me like we can get rid of this middle man with some well managed governmental institutions.

> So the only contribution of Big Pharma is that they take the risk

That seems to me like the big thing you're kind of glossing over. Like I said, I don't really want to go to the mat for them, but I'm sure there's plenty of risks Big Pharma corps have taken buying up research they thought would pay off and then failed to bring to market.

Maybe it'd be better to have governments buying the research and bringing it to market, but as this subthread hints at, profit is one of the big motivations for researchers to do what they do. Hopefully the government would still be paying big bucks for the research, and hopefully the taxpayers wouldn't vote in someone who wants to gut whatever arm of the government is responsible for that after enough failed purchases.

A government, by its size, can spread the risks.

I don't disagree, my point is that it would introduce different risks.

>and hopefully the taxpayers wouldn't vote in someone who wants to gut whatever arm of the government is responsible for that after enough failed purchases.

Oh, well, that would never happen now would it?

There should be a method + requirement to pay royalties back to public funding for basic research, but pharmaceutical companies really bear 99% of the risk and complexity of bringing a drug to market. It's not all that expensive to find molecules that might do something useful, it's obscenely expensive and risky to prove one does something useful.

>There should be a method + requirement to pay royalties back to public funding for basic research,

You mean the patent system? The university of california holds patents on CRISPR, for instance.

CRISPR was obviously commercializable, most academic research is quite a bit further from commercialization and some tiny portion ends up being extremely valuable way downstream nonetheless.

Profit motive can also drive profiteering.

Competition is what drives innovation. There are many ways to chase profits without innovating.

Xerox parc is a good counter-example.

They're totally wrong. War is what funds innovations.

Imagine all the innovation we're missing on every day a country isn't being invaded!

What "innovation" is UnitedHealth doing, pray tell me?

We are talking about delivering care, not innovative medical technology. The biggest single target for innovation in care delivery is to get rid of private insurers.

I think the graph at the top of this article really says it all: https://www.economist.com/graphic-detail/2019/05/22/republic...

By informing them that most of that is funded by taxes and students doing all the work, not corporations and not based on their revenue. If anything, they have an incentive not to make better treatments because better often means less profitable.

You don't, because they are trolls.

You can't possibly argue in good faith that being able to provide less than 0.1% of novel treatments is somehow more valuable than providing good, standard healthcare with already existing drugs and treatment protocols to the other 99.9% at a sane cost.

I'd say we have an unsustainable system, and innovation that makes it less sustainable is not particularly helpful.

I'm going to go ahead and defend them because private insurance is actually far from the most broken thing about US healthcare, yet they seem to shoulder all the blame.

Average health insurance profit margin in US is ~3%. That's not a greedy profit margin. It's the health care that's expensive, not the insurance. Health care is much more expensive in the US than in similar countries. I'm not an expert on why, but there are all sorts of misaligned incentives on IP and drug pricing that need to be fixed. It's not the insurers.

The army of middlemen the doctors and hospitals need to hire to deal with the insurance companies adds a lot to healthcare costs in the US. Not to mention the armies of middlemen hired by the insurance companies themselves.

While every healthcare system has administrators, the US system with its thousands of different systems interacting with thousands of other individuals makes for a nightmarishly complex problem. Doctors in countries with socialized medicine complain about the government administrators too, but at least they only have one system to deal with.

That may be true. I can only assure you that the army of government bureaucrats who do that work in countries with universal healthcare tend to be less efficient.

Why provide personal assurances on the internet? That seems like a "trust me bro" approach.

So tell me, what is the relative cost efficiency of the U.S. Healthcare System vs France/GB/etc..?

People like to use the term government bureaucrat as a thought stopping term, when combined with trust me bro "assurances" it seems extremely hollow.

Give me a data/financial analysis instead of something that sounds like the advice two old dudes sitting in front of a five and dime pre-internet.

You can't assure us of that; the facts say otherwise.

https://www.epatientdave.com/2017/06/16/the-effectiveness-of...

I would be inclined to agree with you, the issues is related to the healthcare vastly overcharging for basic acts such as giving simple drugs such as ibuprofen or paracetemol.

The profit margin is just the shareholders' cut though.

What about the CEO salary? What about his secretary? The rent they pay for the buildings they occupy? Going down that path, how much of the operational expenses of private insurance meaningfully improve patients' health?

Not having to worry about any of those details is the whole point of having a competitive market in the first place. Any company that isn't serious about avoiding overpayment (even to their own CEO) becomes obsolete. And yes, it's a very competitive market with thousands of players and Obamacare setting a ceiling on rates and a floor on coverage.

If the market is competitive, you can trust that you're getting what you pay for. If it's not, well then that's the problem.

Google says UHC made $370b gross revenue and $12b net revenue.

Not sure what the total exec team costs but if the ceo was paid $10 million that’s 0.03% of revenue and 0.1% of profit.

Not defending them but I do think that people hear $10 million but don’t quite realize how huge the pie is.

I don’t think healthcare should be for-profit, but since we do have that system, what do people expect the ceo of a company (any company) that grosses $370b to earn?

It’s a bit reductive to just say something like “he makes $10 million dollars a year denying patient life-saving treatment”, just like saying the ceo of ratheon makes money from the killing of innocent Palestinians.

In the end though, I increasingly feel like the only moral solution is to have a single payer fully socialized system.

You're looking at the wrong numbers. Annual revenue for all of UnitedHealth Group was $370B. Only part of that was UHC insurance premiums. UHG is a huge conglomerate with multiple lines of business, some of which are unrelated to medical insurance or PBM. If UHG spun off the pure software parts of Optum it would be one of the country's 20 largest tech companies.

https://www.unitedhealthgroup.com/investors/financial-report...

>"Average health insurance profit margin in US is ~3%. That's not a greedy profit margin."

Could it be that good chunk of the profits is eaten by overinflated salaries of major execs?

The only reason healthcare is so expensive is because a dysfunctional insurance industry exists.

There are actually many reasons and the commercial insurance industry, while in serious need of reform, is hardly the most significant reason for high costs.

https://www.sensible-med.com/p/the-entire-healthcare-system-...

https://www.bloomsbury.com/us/price-we-pay-9781635575910/

Even using more accurate financial indicators like Operating Cash Flow and Free Cash Flow still leave lots of room to obfuscate egregious behavior.

I don't know, people who talk about profit margins as if they mean anything in this context are either financially naive or are trying to muddy the water.

I'm not sure a low profit margin is indicative of a company providing a moral degree of service to their insured. Certainly naive profit margin percentages don't show the terptitude of overcharging cancer patients.

For someone who doesn't get this, if a company like UHC buys an entire hospital group they can use that expenditure to legally "hide" profits by reducing their "profit margin" short term while decreasing competition in the space.

If a company acquires enough debt in a given year they can "hide" nearly unlimited profit margins legally.

On a larger scale, a company (UHC) can dump money into "external" money losing ventures that just serve to hold wealth and take that money off their balance sheet, once that entity takes on enough debt the same company (UHC) can acquire it taking on that debt and reducing their profit margin yet again.

GE Capital and Amazon are poster children for having done this process in a legal fashion.

As a beginners guide, if you have access to a talented accounting firm you can ask about these approaches to get started:

1. Management & Consulting Fee Arrangements (Especially with Related Parties)

2. Transfer Pricing (in Multinational Contexts)

3. Debt Pushdown & Thin Capitalization

4. Special Purpose Entities (SPEs) or Variable Interest Entities (VIEs)

5. Intellectual Property (IP) Holding Companies

It shows that the US never had a world war on the continent. All the other countries treat health care as a matter of national security. The US’s primary concern is mark to market in pension funds.

> It shows that the US never had a world war on the continent. All the other countries treat health care as a matter of national security.

You seem to be making a weird connection here, but maybe I misunderstand you.

Are you truly suggesting that countries who have socialized health care do so because they've been affected by war on their territory at some point?

It's not just you.

Extremists came from misery, and misery is what drives united states today

I seem to recall John Cleese or some other british person suggesting that the NHS was a given after so many had been through ww2. Wikipedia[1] on the NHS suggests the same, through quotes by politicians.

[1]: https://en.wikipedia.org/wiki/National_Health_Service#Histor...

> shows that the US never had a world war on the continent. All the other countries treat health care as a matter of national security

I forgot about the world-class healthcare the populations of Africa, the Middle East and the war-ravaged parts of Asia enjoy.

I agree there is probably a link between war and healthcare. But the link flows through civic pride and identity, and population-wide familiarity with the horrors of war, more than it does from any sense of military preparedness. (That said, I've never seen an American politician try to sell universal healthcare as a national security imperative. Hmm...)

>It shows that the US never had a world war on the continent. All the other countries treat health care as a matter of national security.

Sounds like https://xkcd.com/1122/

For instance, Canada, which also arguably "never had a world war on the continent" has public healthcare. What gives? What about all the central/south american countries that don't have public healthcare?

Hey don't forget all those brutal incursions during the war of 1812.

"No nomimee whose first name contains a 'K' has lost."

...Until Kamala Harris in 2024. Took twelve years, but...

There are plenty of countries with 'socialized' healthcare that had no wars in their territories.

And which countries would those be?

Australia, New Zealand, etc…

Admittedly not a ground war, but that's not entirely true:

> In total, there were 97 air attacks on northern Australia, though air reconnaissance was carried out over the region by Axis Powers through much of 1944.

https://en.wikipedia.org/wiki/Japanese_air_raids_on_Australi...

and

> German and Japanese surface raiders and submarines operated in New Zealand waters on several occasions in 1940, 1941, 1942, 1943 and 1945, sinking a total of four ships while Japanese reconnaissance aircraft flew over Auckland and Wellington preparing for a projected Japanese invasion of New Zealand.

https://en.wikipedia.org/wiki/Military_history_of_New_Zealan...

If we're counting air attacks

https://en.wikipedia.org/wiki/Attack_on_Pearl_Harbor

> on the continent

We had that too. https://en.wikipedia.org/wiki/Bombardment_of_Ellwood?wprov=s...

All the Pacific Island countries.

Costa Rica

Iceland New Zealand Australia Sweden Norway Switzerland Finland (winter war might count)

I don’t know if your history books are correct… in WWII, Norway was invaded by Nazi Germany and Finland was even allied with them against the Soviet Union before the Soviets forced Finland to drive the Nazis out of the country.

Iceland was invaded by a foreign power (the UK) during WWII.

https://en.wikipedia.org/wiki/Invasion_of_Iceland

https://en.wikipedia.org/wiki/Allied_occupation_of_Iceland

(Very politely, but still...)

> Uncomfortable with the crowd, Consul Shepherd turned to the Icelandic police. "Would you mind ... getting the crowd to stand back a bit, so that the soldiers can get off the destroyer?" he asked. "Certainly," came the reply.

> One Icelander snatched a rifle from a marine and stuffed a cigarette in it. He then threw it back to the marine and told him to be careful with it. An officer arrived to scold the marine.

A historical aside, the reason private health insurance was created in the US was World War 2.

I could be misremembering pieces, but the long and short of it was that salary compensation was capped/restricted during World War 2 and so companies began offering benefits outside of salary, private health insurance among them, to retain their employees.

I'm not sure I follow that argument - Canada shares a continent.

The incentive drives them to do sht like that.

Businesses are immortal unkillable people, per the Supreme Court.

If they kill people, they pay (small to them) fines.

Oh wait, the have special tax laws, depreciation, and deductions that real people can't use.

It's almost like he only recourse is to print out a gun and (censored)

Happy capitalism everybody.

Setting aside human health and agreeing that it should be outside capitalist endeavor would be incredibly damaging to human health. I can hardly imagine any policy that would reduce life years more than that.

Why then do countries with socialized healthcare have linger life expectancy than countries with capitalist-only healthcare system?

Do those countries use any practices or innovations developed by non-socialist entities, or are they entirely socialist-based?

I don't particularly care if health insurance is public or private.

DIRECT health care labor costs (doctor's, nurses, etc) are ~40-60% of TOTAL healthcare spending.

Smart people try to figure out ways to make our system better every day. If there was a silver bullet, we'd have already taken it.

Health insurance profits are ~1.2% of total health care spending, the cost of running it is approximately ~4% more.

It's always going to cost SOMETHING to run - whether you move it to the private or public sector is largely a rounding error.

If you take all those insurance jobs and pop them into the Federal Government - you're unlikely to see much efficiency gains (the most pro-medicare articles state it's 37% more efficient - that's an improvement of ~1.5% in total spending).

UHC had a net margin of 6.1% in 2024.

Sure, if all 6.1% of that went to spending instead of profits - health care would be slightly better.

But it's mostly a rounding error. Private health insurance profits are only ~1.2% of total spending.

Maybe you're focused on a ~6.1% margin, or ~$60B in total profits.

You're not going to get substantially better outcomes by simply having ~1.2%-2.7% more money to spend.

You'd need to bring down the actual cost of healthcare substantially - which isn't going to happen unless you pay doctor's and nurses way less money.

Pharmaceuticals are only about 9% of total US healthcare spending - even if you nationalize that (never going to happen) - you're still not getting substantially better / cheaper outcomes.

Profits on pharmaceuticals is <2% of total spending as well.

The only way you're getting significantly cheaper service is by reducing your biggest cost significantly - i.e. paying less for direct patient healthcare (doctor's, nurses, etc), and that's probably not a great strategy for getting better outcomes.

Who knows? NHS pays doctors dirt, and their system isn't obviously worse than ours. Some people think it's way better, others way worse.

I have good news! If you move it to the public sector, you will effectively pay doctors less money for the same work. That's because the way it works currently is that the doctors have to deal with private insurance bureaucracy. By freeing them from this responsibility, they have more time to take care of patients, which should effectively gets you more medical bang for your buck.

You're describing the federal system being massively more efficient - which is theoretically possible - but rarely happens in practice.

It is already established fact that Medicare is more efficient than private insurance. https://www.healthaffairs.org/do/10.1377/forefront.20110920....

Assuming that your numbers are correct:

You eliminate ~1.2% of total healthcare spending on private insurance profits.

Then you eliminate ~37% of ~14% of ~27% total healthcare spending on insurance labor costs = ~1.5%.

* Article states medicare is ~37% more efficient.

* Insurance companies are required to spend AT LEAST 80% of premiums on actual patient care (~6% of the remaining ~20% are profits - already taken out in the previous ~1.2% of total health care spending).

* ~27% of total US healthcare spending is on private insurance premiums.

You end up with ~2.7% cheaper healthcare in the ABSOLUTE best case.

That's not moving the needle.

You are absolutely ignoring the fact that you don't just get cheaper care (and lets also remember that spending is inflated by the bullshit of insurance "negotiation"), but oh, now everyone has healthcare, not just those employed with a decent employer who provides it.

- That literally moves the needle. You don't want your healthcare to cost 2.7% cheaper? If you were buying a TV and Best Buy sold it for $1000 but Costco sold it for $973 you wouldn't buy it from Costco?

- Insurance companies being required to spend at least 80% of premiums on patient care logically incentivizes them to keep patient care costs high, because if costs go down then profit goes down. If your MRI costs $1000 then the insurance company is allowed to make $200 in profit. If your MRI costs $2000 then the insurance company doubles their profit to $400.

- Removing private insurance would give public healthcare far more negotiating power on costs. While there is a limit to profit margins made by insurance companies, there is no limit to the profit margins made by medical suppliers, pharmaceudicals, etc.

- Removing non-paying patients would reduce prices charged by hospitals. Hospitals are essentially sub-prime lenders making loans out where no assets are involved. They have to charge insurance companies more money to cover everyone else who doesn't pay. Moving to healthcare paid for automatically completely removes the issue of unpaid bills, collections, medical bankruptcies (how much do the salaries of bankruptcy courts, judges, lawyers remove from the healthcare system?).

- You're arguing against the established fact that all other countries besides the United States spend less on care. If the United States tried anything else it would be likely to reduce costs.

The federal system already runs a much more efficient enterprise as evidenced in medicare and medicade since their establishment in the 60s.

It seems to me like centralized governments have had a rise that whether impressive or just typical of an average country, was thought to be impossible for them. Couldn't the past performance be down to the absurd costs of data collection and management in the past and the lack of scaling benefit when centralizing gigaflops of secretaries or the costs of doubling a very small number of bytes of information on every household at that time?

Honest question as someone who prefers single payer but acknowledged it's not a silver bullet: how much of the costs are nurses and doctors vs. admin? It seems to me there's a lot of overhead in passing the bills around to get paid. I just had my appendix out last year and got billed 8 times by 8 different firms, each with payment portals, call centers, billing providers, etc. I assume there's a lot of inefficiency internally too.

~40-60% is direct healthcare - not including admin or insurance labor costs.

Pharmaceuticals is ~9%.

Health insurance profits are 1.2%.

Other profits are x%.

Medical equipment, devices, hospital rents, etc are y%.

Most of the remainder is admin & insurance costs - only about ~2% of which is private health insurance operating costs (largely labor).

You're ignoring the fact that all of the large insurers are increasingly also the healthcare providers.

UnitedHealth Group is the owner of both United Healthcare (the largest insurer in the country) and Optum (the largest healthcare provider in the country).

Part of UHG's low profit margin is its liberal use of intra-company eliminations, where transactions between Optum and United Healthcare get zeroed out and don't count toward profit despite it ultimately generating more dollars in the parent company's coffers.

Medicare administrative costs are around 2% of total program spending [1] compared to typically >10%. While what you're saying on the surface may be true from the numbers you are comparing, the fact of the matter is that healthcare costs are becoming more and more expensive during a time when many are experiencing a cost of living crisis.

The US gets a bum deal on costs and outcomes and while we can argue on which specific changes will move which specific needle I think it's clear that one of the major differences compared to the rest of the world is that running healthcare as a for profit enterprise has failed to deliver on the promise of good outcomes for as affordable a price as possible both on an individual and country wide level.

[1] https://www.politifact.com/factchecks/2017/sep/20/bernie-san...

> While what you're saying on the surface may be true from the numbers you are comparing, the fact of the matter is that healthcare costs are becoming more and more expensive during a time when many are experiencing a cost of living crisis.

Which has almost nothing to do with the amount of profits derived from private health insurance - that's only ~1.2% of spending.

Maybe it used to be ~0.8% - that delta is not moving the needle.

But has everything to do with the need to take a closer look at the entire system and how we can do things better.

I feel like focusing on this part of my comment vs. the bum deal part is disingenuous since non-US countries have figured out how to do it for cheaper with better outcomes without the main focus being the up and to the left drive for profit that our current system mandates.

> But has everything to do with the need to take a closer look at the entire system and how we can do things better.

People do that literally everyday.

If there was a silver bullet, we'd take it.

If there is a silver bullet, the first step would be getting rid of the for profit mechanisms.

Instead, because despite data linked in this thread that profit margins are only a few percentage points, Healthcare is an incredibly lucrative field that extracts a lot of money into the private market without delivering results commensurate with the cost to the public.

Add to that lobbying making it incredibly simple and cost effective to influence policy (which comes out in the P&L as a cost of doing business and so isn't tracked as profit FWIW), we are stuck with this situation despite overwhelming evidence that it's a bad deal.

Kaiser Permanente, Providence Health, all the insurers in the BCBS franchise except Elevance, and many others are non profit.

Yet they are unable to provide lower premiums than UNH/Elevance/CVS/Cigna/Humana/Centene/Molina.

Kaiser is a full vertical, you buy insurance from them, you see their doctors and nurses in their outpatient clinics and hospitals, you get medicine from their pharmacies. So why is everyone not choosing Kaiser?

Edit to respond to below since posting limit hit:

UNH had $371B in revenue, not profit, therefore it is irrelevant. If the claim is UNH is excessively profiting, then profit margin is the only metric relevant to the discussion.

Kaiser's managed care organization IS non profit, so it is relevant here. It clearly shows that the managed care portion of the business is not sucking out outlier amounts of profit, because Kaiser's premiums are not different to UNH or any other MCO's premiums. Also, Kaiser's annual revenue is $100B or so, not $4B.

https://about.kaiserpermanente.org/news/press-release-archiv...

If a managed care organizations being for profit or non profit was the straw that was breaking the camel's back, then it would show up as non profit managed care organizations being able to offer much lower premiums.

>say that for profit is the way to go because if Kaiser can't do it then nobody can.

I am not claiming for profit is the way to go (or the opposite). I am saying, within the confines of the US healthcare system, for profit managed care organizations are not THE source of higher healthcare costs.

Kaiser had an income of 4.1B in 2023 vs. UHG's 371.6B in an industry of 4.8T [1]. I'm not sure the point you're trying to make or why it's relevant unless you're asking me to read between the lines on the efficacy of Kaiser as a non-profit vs. their for-profit counterparts (which is what seems to be the case).

edit: I think I missed the last part of your comment in an edit, so to attempt to answer my own questions, it's not a fair comparison beyond just the almost 100x size difference to compare a different business model and scope, provider network, risk pool and geographic presence yet ignore every other developed country in the world and say that for profit is the way to go because if Kaiser can't do it then nobody can.

[1] https://www.reuters.com/business/healthcare-pharmaceuticals/....

I think this is a statistical artifact. Medicare preferentially selects the cohort of customers most likely to demand services from providers (that's the premise of the program). Fixed fees in, floating costs out. If you extended Medicare to 30 year olds, that 2% would, mechanically, soar; the same inputs from customers, but drastically lower service delivery.

The same statistics are similar for Medicaid too but also missing the forest for the trees in that for profit seems to be the main differentiator with the US vs. other parts of the world. There are plenty of models around the world that show this works and it works well.

First it's the government can't do this, then it's the government wouldn't do this because of this reason while ignoring that the US healthcare system is spending more than any other country and missing the mark on outcomes. Every other developed country in the world has figured this out. While not perfect, they're paying less and broadly getting better outcomes.

This is my issue with M4A: it seems clear from the numbers that the problems in our system --- and I think they're grave --- are almost entirely on the provider-side, and Medicare has, if anything, locked us into those cost structures. If anyone's curious why there's a scarcity in physician care hours in the US: Medicare rate limits the number of new doctors allowed into the system every year, through the residency funding system.

Agree that it's not perfect, but I do feel that we could take 60-80% of the money we're currently spending and fix this and any other issues that come up and get in the way of improved outcomes like the rest of the world does.

I don't know why what you're describing happens, but my money would be on some triage that needs to happen due to limited funding since so much of our spending goes into private healthcare solutions.

I really just have two things to say on this subthread:

* Medicare would not have 2% overhead if it served 30-year-olds.

* Medicare is in fact the primary constraint on the supply of doctors in the US system.

Fair, don't think I disagree with you on these points. I just believe we can do significantly better. In a similar vein, I believe:

* For profit motives get in the way of cheap, effective healthcare. Maximizing shareholder value leads to higher prices, overutilization of expensive proceedures and prioritization of profit generating services vs. preventive care or basic health care needs and improved outcomes.

* Incentives are currently heavily skewed to the point that providers and insurers are more likely to treat symptoms rather than address root causes or preventive measures leading to a cycle of chronic illness and higher long term costs.

* Access to healthcare should not be tied to socioeconomic status. Employer sponsored insurance and high out of pocket costs create significant barriers for lower income individuals and families, dragging the average down (i.e. the system is fine if you can afford it).

* Administrative complexity in the current system massively inflates cost. The fragmented nature of private insurers, billing systems and out of network shenanigans results in massive inefficiencies and expenses that contribute nothing to patient outcomes. I am confident this comes out to more in savings than the %age profit that is referenced in other places in this thread.

  Medicare would not have 2% overhead if it served 30-year-olds.

Swing and a miss. Medicare does cover 30 year olds, you just have to be sick enough to qualify. So in fact Medicare covers the least profitable young folks.

Edit since responding to your prolific bad faith arguments got me throttled:

Your argument is that younger people would magically add to the overhead incurred by Medicare. My point is that Medicare's low overhead already includes younger people who are more likely to use expensive modes health care more frequently than the typical younger person. And even then Medicare denies claims at a much lower rate than for-profit insurance companies.

But somehow, adding more, healthier younger folks to Medicare would add to the overhead?

Nah.

Edit since I might as well address another bad faith argument:

  Medicare rate limits the number of new doctors allowed into the system
  every year, through the residency funding system.

Congress controls that funding. Medicare is the administrator. At best your phrasing is disingenuous.

I don't think this point is helping your argument the way you think it is.

I think the issue here is that you don't understand my argument. Fixed prices, floating costs. Do the math. Your point would make sense if 30 year olds paid something differently than 65-year olds.

It is already established fact that Medicare is more efficient than private insurance: https://www.healthaffairs.org/do/10.1377/forefront.20110920....

6.1% profit margins is a lot when it should not be for-profit in the first place. Why is anyone making a profit off of administering necessary services?

What is the operating profit of your local firefighter brigade?

What is the operating profit of the interstate highway system?

What is the operating profit of your local water/sewer department?

Not a single person in this country doesn't need healthcare at some point. It's not an optional for-profit good.

Medical Loss Ratio (MLR) is capped at 85% in the US which means 85% of revenue must go to patients. This is roughly inline with other countries with universal healthcare (MLR ranges from 85-95%).

The fundamental problem is that we don’t have enough resources to take care of everyone. Insurance companies are faced with the impossible task of allocating resources and making care/nocare decisions.

I don’t get the “endless profiteering” angle against insurance companies. If anything it’s the providers who are screwing over patients by gaming insurance and taking more than is necessary from the shared insurance pool of money.

The more revenue an insurer brings in, the larger that 15% slice of the pie. The fact that they have a capped MLR is beside the point.

But when UnitedHealth requires medications to be purchased from Optum health (with whom they share a parent company), they can jack up the price of a drug and keep some of that 85% too.

They own the physicians, too.

https://www.statnews.com/2024/07/25/united-health-group-medi...

To whom they pay higher "medical loss":

https://www.statnews.com/2024/11/25/unitedhealth-higher-paym...

so by increasing the cost of patient care, they can take out more profits.

I’m not an expert but I’m wary of anyone who has a simplistic view of what seems to be a complex system. This, plus looking at the profit margin of UHC paints a more nuanced picture (net profit margin is not that high. the dollar amount is high because the scale of the company is big). (Not that I want to make money from denying people healthcare, no matter how much internal logic there is to it…)

But it does seem like there’s a serious prisoners dilemma type situation going on in American health care. It’s easy to point fingers at someone else.

The situation is also coupled with a toxic political environment where a Trump voter can simultaneously be against “Obamacare” and think that Trump is going to improve access to healthcare, and a Harris voter can be pro Obamacare and ignore regulatory capture by pharmaceutical companies- e.g., both sides so convinced they’re right and the other side is wrong they won’t be seen to agree on anything common sense.

> If anything it’s the providers who are screwing over patients by gaming insurance and taking more than is necessary from the shared insurance pool of money.

If the 85% gets larger, so does the 15%. Both sides gain when the cost increases.

Insurance isn't a good industry to "get insanely rich". It doesn't have high profit margins. For one thing, the ACA mandates that insurance companies can't keep profits past a certain point.

My sense is that people expect too much from their health insurance. Subconsciously, we expect to experience no pain and live forever. When this inevitably doesn't happen, we blame insurance companies for not bankrolling infinite healthcare.

Clearly with Private Equity entering healthcare this is patently false.

The article is about insurance company malfeasance, but this boils it down to mis-aligned consumer expectations about living forever in total bliss. That feels like a strange disconnect.

There is a max % take insurance companies can have.

The easy as hell solution to this is insurance companies collude with hospitals to charge patients more. 5% of 5000 is more than 5% of 2000.

In some cases insurance companies just buy up hospital chains and then bill themselves whatever the hell they want to.

The miracle of US healthcare is how at every step, work is done to minimize every party's ability to either use market power to lower costs, or to make people cost-conscious about their own expenses.

Insurance, in a vacuum, detached from an industry is a perfectly sensible way to try to spread risk. And as you say, this fair, reasonable insurance isn't about getting extremely rich, but about being the best at identifying where the risks are, and using market power to lower costs. But with healthcare, and especially with the US peculiarities, we manage to get minimal value out of it.

People getting care don't know their options, and how different the pricing can be. Insurers are capped by a percentage of services paid, so they really are happy if everything is very expensive. Providers band together into conglomerates that make sure it's hard for insurers to lower reimbursement rates. Pharmacy benefit managers build complicated schemes that let them take a bigger piece of the pie. They even purchase pharmacies, and restrict the expensive purchases for themselves, while the local pharmacy is squeezed. All in all, it gets very expensive, with minimal control of spiraling prices, and nobody that can lower costs is incentivized to do so.

We blame insurers because that's the people that get paid first, but yes, it's not really a matter of just insurers. It's a kafkaesque system that is basically impervious to significant reform. And for good reason: Every dollar we overpay is someone else's salary. A decrease in costs per person for the same care to match, say, Spain would involve a whole lot of people making a lot less money, including many losing their jobs. Not exactly a political winner, even though the country would be better off with more efficiency

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